Malta’s hospitality boom built on €8.90-an-hour cheap labour

Malta’s hospitality boom rests on workers earning €8.90 an hour, barely half the euro area average, according to a Central Bank study that exposes the low wages underpinning the sector’s rapid expansion.

Hotels, restaurants and other accommodation and food service businesses recorded the lowest hourly wages among Malta’s service sectors in 2024. The equivalent euro area average was €16.70.

The study, by economist Eliza Farrugia, puts annual compensation per employee at €17,200 in 2025, compared with €36,000 across the Maltese economy.

The gap persists despite compensation growing by an annual average of 5.2% between 2013 and 2025.

Business has expanded sharply. Active accommodation and food service businesses increased by around 80% between 2015 and 2024, reaching 4,297. The sector generated €1.15 billion in real gross value added in 2025.

Its workforce reached 32,473 that year. Foreign workers accounted for 58% of employment, against 35% across the economy.

The sector’s growing dependence on overseas recruitment has increasingly centred on non-EU nationals, although the study notes that reclassifying British workers after Brexit explains part of the shift.

Foreign workers in hospitality had a median stay of just 2.3 years, below the national figure of three years. EU workers stayed around one year; non-EU workers stayed close to three.

The figures point to an industry combining sustained labour demand with a workforce that turns over frequently.

Growth has also failed to lift hospitality out of the economy’s lowest productivity ranks. Only construction recorded lower real value added per person employed, according to the study.

Profitability tells a divided story.

Accommodation businesses improved their position between 2013 and 2025, while food and beverage services deteriorated.

Micro businesses represented 93.4% of firms but employed 29% of workers.

Behind the expansion in visitor accommodation and business numbers, the study documents an enduring reliance on low-paid labour.